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whats missing? O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,920,000. Under
whats missing?
O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,920,000. Under the other proposal, the company would focus on Kentucky and open 6 stores at a cost of $2,700,000. The following information is available: Indiana proposal Required investment $1,920,000 Estimated life 10 years Estimated residual life $40,000 Estimated annual cash inflows ovel the next 10 years $400,000 Required rate of return 12% The net present value of the Kentucky proposal is closest to: O A. $1,807,120 OB $1,832,880 c. $1,820,000 OD. $4,532,880. i Data Table Present Value of $1 Periods 7 8 9 10 11 12 6% 0.665 0.627 0.592 0.558 0.527 0.497 8% 0.583 0.540 0.500 0.463 0.429 0.397 10% 0.513 0.467 0.424 0.386 0.350 0.319 Print Done Hatodaiwa. i Data Table 8% 0.583 0.540 0.500 0.463 0.429 0.397 10% 0.513 0.467 0.1124 0.386 0.350 0.319 12% 0.452 0.404 0.361 0.322 0.287 0.257 14% 0.400 0.351 0.308 0.270 0.237 0.208 Print Done $1,920, timated life tipated casidali 10 ye i Data Table Present Value of Annuity of $1 Periods 6% 7 5.582 8 6.210 9 6.802 10 7.360 11 7.887 12 8.384 8% 5.206 5.747 6.247 6.710 7.139 7.536 10% 4.868 5.335 5.759 6.145 6.495 6.814 Print Done Indiana proposal $1,920,000 10 years A000 10% 4.868 5.335 5.759 6.145 6.495 6.814 12% 4.564 4.968 5.328 5.650 5.938 6.194 14% 4.288 4.639 4.9.90 5.216 5.553 5.660 Print Done Step by Step Solution
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